Eurozone

The European Central Bank (ECB) will wait at least six weeks to assess the impact of the UK's Brexit vote before deciding if it needs to boost economic stimulus measures.

Mario Draghi, the ECB's president, said the central bank would “continue to monitor economic and financial market developments very closely”, but gave no clues as to what measures may be taken.

Mr Draghi said his organisation would be better suited to make an effective decision when a few months worth of economic data for the eurozone has been published.

When the time comes, the ECB may choose to cut interest rates or boosts its Quantitative Easing programme.

Earlier this month, the Bank of England decided to take the same approach to its policy on the UK economy, leaving interest rates and QE on hold. Comments made by the governor of the Bank of England, Mark Carney, had suggested that the bank would cut interest rates in July.

Ian Kernohan, economist at Royal London Asset Management, said: “While we think Brexit uncertainty is mainly an issue for the UK economy, there is also bound to be some knock-on impact on the eurozone. With post-Brexit evidence still patchy, we think the ECB will wait until the September meeting before extending its QE timetable.

“Inflation remains far below the ECB’s target of 2% and while headline inflation will rise later in the year, thanks to the fading impact of a lower oil price, underlying inflationary pressures still remain very low. Delaying until September will allow an assessment of any Brexit impact to be outlined in the new ECB staff forecasts.”